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Who's Beating Us in Cashless Payments

NEW YORK ( TheStreet) -- It's no secret that more and more Americans are turning away from cash in favor of using debit cards, credit cards and mobile and online payments.

It turns out the rest of the world is going cashless too.

According to a report from MasterCard called The Cashless Journey , of $63 trillion spent by global consumers in 2011, 34% of those transactions were cash based and 66% were paid for with cashless currency such as credit or debit cards or electronic payments.

For consumers, the trend away from paper-based currency is about convenience. Buying a pair of jeans or filling the car at the pump using cash costs consumers time, and as any economist will tell you, the extra stop at the ATM or bank to draw out cash is just as much a commodity as a $20 bill.

There's also the risk of losing cash stashed in pockets or in the console of a consumer's car or truck.

Consumers are also turning rapidly to smartphones to pay for goods and services, rendering even credit cards less useful. According to Forrester Research , mobile payment usage in the U.S. will rise to an estimated $90 billion in 2017 from $12.8 billion last year.

"What seems to be overlooked in the policy dialogue is that cash takes time to access, is riskier to carry and costs a country up to 1.5% of its GDP," says Peer Stein, an analyst at the International Finance Corp. "We can't expect the journey from cash toward electronic payments to be completed overnight, yet driven by technological advances and public-private partnerships this trend has gathered significant momentum over the past few years."

The MasterCard study says the U.S. is at a "tipping point" and that the only reason consumers even use cash is due to history and habit.

Still, the road to a cashless society includes several categories of global consumers. Analysts at the U.K.-based Kantar Media 's TGI Insights & Integration team say there are three types of financial consumers right now:

Cashless converts: Those who have already readily embraced a largely cashless existence.

Cashless cautious: Those who have taken first steps toward moving away from cash but still have a ways to go.

Cashless concerned: Those who still cling fiercely to cash as the default means of payment.

Until the last category is convinced cash is a quaint relic, global governments will keep printing paper currency, even if they'd prefer not to. ���